The gpl85 erbB-2 receptor-like molecule is tyrosine phosphorylated in vivo in hematopoietic, mammary epithelial and fibroblast cell lines. This phenomenon can be explained by three hypotheses: (1) a ligand is produced by all of these cell lines; (2) a ligand is present in the tissue culture medium: and (3) the gpl85 erbB-2 is constitutively active. These hypotheses were tested studying the phosphorylation status of erbB-2 in a chemically defined medium and the transforming and biochemical activities of a chimeric molecule bearing the extracellular domain of erbB-2 and the intracellular domain of the epidermal growth factor receptor (erbB-2 EC/EGFR IC). This chimeric molecule was engineered by taking advantage of unique restriction sites generated in erbB-2 and EGFR cDNAs at homologous positions. This molecule was shown to be indistinguishable from the parental erbB-2 as assessed by its ability to bind a panel of monoclonal antibodies raised against the protein in its native configuration. Furthermore, it could be biochemically and biologically stimulated in vivo by some of these monoclonal antibodies. increasing its phosphotyrosine content and delivering a mitogenic signal. Nevertheless, this molecule showed no transforming activity in a transfection assay and no tyrosine phosphorylation in vivo when expressed in NIH/3T3 cells at levels comparable to its parental molecules. The erbB-2 molecule, therefore, seems to be endowed with constitutive kinase and biological activities. The use of down-regulating agents in order to achieve reversion of the transformed phenotype seems a rational possibility on the basis of these data.